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Asia Pacific Financial News from John Lothian News – December 8, 2017

Lead Stories

From taxis to temples, Alipay’s fast-expanding cashless world; Ant Financial’s empire raises concerns of customer data use by Beijing
YUSHO CHO and JOYCE HO, Nikkei
HANGZHOU/HONG KONG — To fully understand the changing concept of consumer credit in China, one need look no further than Alipay, the online payment platform operated by e-commerce giant Alibaba Group Holding’s affiliate, Ant Financial Services Group.
https://goo.gl/g4SrP9

Automating Asia Pacific’s Liquidity-Sourcing Needs; Firms are on the lookout for the ultimate piece of cutting-edge technology in liquidity that will outshine the competition
Ayden Koh – Finance Maganates
As the world’s financial products become increasingly traded in today’s electronic trading market, liquidity has become the asset of absolute importance. Perhaps the most important attribute of deep liquidity is how it provides smooth price action due to high-volume round-the-clock trading, which in turn creates more favourable conditions for all.
https://goo.gl/JahZcf

HSBC Steps Up Scrutiny of Chinese Conglomerate HNA
By Vinicy Chan – Bloomberg
Bank officials tell dealmakers not to pitch new HNA business; Concerns center on conglomerate’s debt load, reputational risk
HSBC Holdings Plc, Europe’s biggest bank by assets, has told its dealmakers to avoid pursuing business for now with embattled Chinese conglomerate HNA Group Co., people with knowledge of the matter said.
https://goo.gl/ysbjrZ

Alibaba to Invest $200 Million In India Online Grocer
By Saritha Rai – Bloomberg
Alibaba Group Holding Ltd., China’s e-commerce giant, plans to invest about $200 million in India’s largest online supermarket, Bigbasket, leading a $280 million funding round in the startup, according to people familiar with the negotiations.
https://goo.gl/vSBSPC

Asia’s New Politics of Outrage; Frustration and social dislocation are fueling anti-blasphemy protests from Indonesia to Pakistan.
By Pankaj Mishra – Bloomberg
Stunning mini-revolutions have erupted in recent months in two of the world’s largest Muslim countries. The first shock came in Indonesia, where a little-known group of activists led a mass protest against the Christian governor of Jakarta. Accused of disrespecting the Prophet, the governor, a close ally of the country’s president Joko Widodo, is now in prison. In Pakistan in late November, another pop-up political outfit besieged the capital city Islamabad, forcing the government to concede to all their demands, which included the harsh implementation of blasphemy laws.
https://goo.gl/zoQ8Gs

Pentagon Papers whistleblower Daniel Ellsberg on Trump and North Korea; The former cold war hawk talks about Snowden, Nixon and the chances of avoiding a nuclear catastrophe
Edward Luce – FT
I am half-expecting an invalid to turn up. Daniel Ellsberg’s publisher had emailed a week before to say he had been suffering from laryngitis, needed rest, and that his energy tended to flag early. They asked if I could bring the lunch forward to before noon. I could hardly blame Ellsberg, now 86, for wanting to cut our engagement short.
https://goo.gl/9R35j2

UK court rebukes HSBC over missing forex trading records
Caroline Binham – FT
HSBC was on the end of a judicial rebuke after belatedly finding a whole swathe of trading records it previously claimed did not exist as part of a lawsuit it faces over allegedly front-running foreign-exchange trades.
https://goo.gl/eA3Cdi

Exchange News

Asia Equity Exchange Group, Inc. Announces Closing of a Private Placement for $15 Million of Common Shares
PR Newswire
Asia Equity Exchange Group, Inc. (OTC: AEEX) (or the “Company”), a leading equity investment and financing information services provider in Asia, announced today that it has completed a self-directed private placement (the “Placement”) of 4,300,000 shares of common stock of the Company for $3.5 per share pursuant to a Subscription Agreement dated November 21, 2017 (the “Subscription”). The gross proceeds of the Subscription is approximately $15 million. The total number of newly issued shares represent approximately 3.62% of the issued and outstanding number of shares after giving effect to the Subscription.
https://goo.gl/LXQDzh

Cryptocurrency Derivatives: Tokyo Financial Exchange Moves Forward, South Korea Enacts Ban
MATTHEW DE SILVA – ETH News
As if bitcoin itself has not inspired sufficient confusion and various reactions, now regulators must contend with cryptocurrency derivatives.
Just as financial authorities were coming to terms with bitcoin, there’s a new challenge on their hands: cryptocurrency derivatives.
https://goo.gl/oDwkJQ

Regulatory News

ASIC cancels AFS licence of Michael James Haley
ASIC
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian Financial Services (AFS) licence of Michael James Haley after finding he has ceased to carry on a financial services business.
https://goo.gl/najdbN

ASIC calls on preparers to focus on financial report quality and new requirements
ASIC
ASIC has called on companies to focus on giving information for users of financial reports that is useful and meaningful, and to address the impact of major new accounting requirements.
https://goo.gl/3MZQPH

Central bank calls for full enforcement of financial regulations
Asia Times
PBC boss says agency will focus on prevention of liquidity risk, shadow banking risk, abnormal market volatility and cross-border capital flow
https://goo.gl/WkkaPP

Dubai Financial Services Authority & Hong Kong Monetary Authority Sign Fintech Cooperation Agreement
Crowdfundraiser.com
The Hong Kong Monetary Authority (HKMA) and the Dubai Financial Services Authority (DFSA) have signed a Fintech Co-operation Agreement today to boost collaboration between the two regulatory authorities, with a view to facilitating financial innovation in the two jurisdictions.
https://goo.gl/uHMvcj

Investing News

HSBC beefs up Asia research team with 15 new hires in China
Reuters Staff
HSBC (0005.HK)(HSBA.L) said on Friday that it had expanded its Asian research team by hiring 15 analysts following the launch of HSBC Qianhai Securities, the first Chinese securities joint venture to be majority-owned by a foreign bank.
https://goo.gl/6QSrrr

Asia Plus envisions SET reaching 2,000 in 2018
NUNTAWUN POLKUAMDEE – Bangkok Post
The Stock Exchange of Thailand (SET) is expected to skyrocket to 2,000 points next year, propelled by strong economic growth momentum led by the banking and telecommunications sectors, says securities…
https://goo.gl/mS7CnC

ICICI Picks Banks for IPO of $3 Billion Brokerage Arm
By George Smith Alexander and Anto Antony – Bloomberg
BofA, Citigroup, Citic CLSA among firms working on offering; Brokerage arm’s share sale slated for first quarter of 2018
ICICI Securities Ltd., a unit of India’s largest private-sector lender by assets, has picked arrangers for an initial public offering that could value the company at more than 200 billion rupees ($3.1 billion), people familiar with the matter said.
https://goo.gl/s9ZPf5

Sensex gains 300 pts on global cues; The National Stock Exchange’s Nifty gained nearly one per cent or 99 points to close at 10,265.7
Samie Modak – Business Standard
The BSE benchmark Sensex rallied a little more than 300 points for a second day, buoyed by a sharp rally in global equities and expectation of a Bharatiya Janata Party (BJP) victory in the Gujarat election.
https://goo.gl/598brt

Japan

EU and Japan finalise ‘cars-for-cheese’ trade deal; Accord covers market of 600m people and 30 per cent of global GDP
Cat Rutter Pooley in London and Jim Brunsden in Brussels – FT
The EU and Japan have agreed the final pieces of a major free trade agreement — dubbed the “cars-for-cheese” deal by some commentators — saying the accord sends a “clear signal” that global markets remain open.
https://goo.gl/cTjKYB

Japan to buy cruise missiles capable of striking North Korea; Tokyo says purchase of air-launched weapons with 900km range is purely defensive
Robin Harding in Tokyo – FT
Japan announced plans to buy air-launched cruise missiles capable of striking North Korea in a decision that means a nation committed to pacifism will acquire its longest-range weaponry.
https://goo.gl/bYraU4

Point72’s Oda Leaving to Open His Own Japan-Focused Hedge Fund
By Klaus Wille – Bloomberg
Singapore-based Oda to start Blue Swell Asset Management; Was autonomous unit of family office Point72 since last year
Tomofumi Oda, a portfolio manager at billionaire Steven Cohen’s Point72 Asset Management, is leaving the $11 billion family office to start his own firm betting on rising and falling Japanese stocks.
https://goo.gl/B6khnE

Mainland China

IMF Warns China of 3 Financial Stability Risks; China’s central bank accepts IMF’s “overall” valuable recommendations and vows to improve the weaknesses.
By Charlotte Gao- The Diplomat
On December 6, the International Monetary Fund (IMF) released its assessment on China’s financial stability and identified three major “tensions” emerging in Chinese financial system.
https://goo.gl/kTj8Kj

China money rates end week lower, but financial risk rules dent sentiment
Reuters Staff
China’s primary money rates eased slightly this week despite the largest weekly net cash
drain since early February, but overall cash conditions remained tight as investors ondered the effect of new regulations to reduce financial risk.
https://goo.gl/XqAK3i

Yearender-Economic Watch: China gets tougher on curbing financial risks
Xinhua
China’s top banking regulator has escalated efforts this year to put financial markets under stricter scrutiny to better guard the sector against risks.
https://goo.gl/qT3X1C

China’s HNA dismisses liquidity concerns; Group director does acknowledge year-end cash tightness as banks hit lending quotas
Lucy Hornby in Haikou, China – FT
HNA Group has dismissed concerns about its liquidity but acknowledged a year-end credit squeeze as Chinese banks come to the end of their lending quotas.
https://goo.gl/BXKKwR

Hong Kong Financial Services Firm in Corruption Probe
Finews.Asia
Three executive directors of financial services firm Convoy Global Holdings are under investigation by anti-corruption authorities in Hong Kong.
https://goo.gl/89pV7X

HNA Mystery Charity Begins ‘Difficult’ Job of Valuing Assets
Bloomberg News
New York-based Hainan Cihang Charity hired consultants for job; Foundation is at center of mystery surrounding HNA ownership
HNA Group Co.’s New York-based charity has begun an assessment that may shed light on the mysterious top shareholder of the Chinese conglomerate that owns large stakes in Deutsche Bank AG and Hilton Worldwide Holdings Inc.
https://goo.gl/gnwsbb

Hong Kong

Hong Kong Antigraft Watchdog Arrests Three Executives at Listed Companies; Small-cap financial companies Lerado Financial Group, Convoy Global Holdings confirm involvement in probe
By Joanne Chiu and John Wu – WSJ
Two Hong Kong-listed financial companies confirmed they are involved in an investigation by the city’s Independent Commission Against Corruption.
https://goo.gl/K8HvCD

Executives Arrested as Hong Kong Intensifies ‘Enigma Network’ Probe
By Sam Mamudi – Bloomberg
ICAC and SFC searched eight locations in a joint operation; Crash in June saw some stocks plunge by as much as 90%
Five months after one of the most dramatic stock crashes in Hong Kong history, the city’s authorities are stepping up their investigation into a group of companies that one prominent investor has dubbed the “Enigma Network.”
https://goo.gl/4S46Ub

Indonesia

Indonesia’s exchange woos millennials with shows, contests
Today Online
Indonesia’s stock exchange is having trouble luring retail investors. Their solution? Target the millennials.,While the participation of individual investors in Indonesia is low compared with other Asian countries, those aged between 21 and 30 account for 26 per cent, the biggest share of any age group, according to data from Indonesia Central Securities Deposit.
https://goo.gl/7c7rrg

Vietnam

Industry 4.0 to affect retail banking
Vietnamnet
The trend towards non-cash payments and digitalization in retail banking and the maturation of FinTech (financial technology) companies in Vietnam present major opportunities as well as challenges for retail banks during the fourth industrial revolution (Industry 4.0), the Vietnam Retail Banking Forum 2017, co-organized by the Vietnam Banks Association and IDG ASEAN on December 6 in Hanoi, with the theme “The Future of Retail Banking and Payment in the Fourth Industrial Revolution,” heard.
https://goo.gl/PaQAzd

Taiwan

Taiwan’s ‘New Southbound Policy’ Scores Win in the Philippines; Taipei hopes its expanded investment agreement with Manila is the first of many with ASEAN partners.
By Shannon Tiezzi – The Diplomat
Taiwan’s Tsai administration scored a victory for the “New Southbound Policy” this week, as Taiwan and the Philippines inked an updated investment deal in Makati, the Philippines’ financial hub. Under President Tsai Ing-wen, Taiwan is pursuing closer links with South and Southeast Asia, in an attempt to hedge against overdependence on mainland China.
https://goo.gl/Fc5s6p

South Korea

South Korea mulling ways to curb craze for bitcoins
Youkyung Lee – The Associated Press
South Korean is studying ways to regulate speculative trading in crypto currencies as the latest surge in prices stokes a craze over bitcoins.
https://goo.gl/cMcK1S

South Korea Forbids Bitcoin Derivatives as Exchanges Charge 23% Premium; South Korean authorities are attempting to reign the escalation of Bitcoin mania in the country
Victor Golovtchenko – Finance Magnates
The massive discrepancy between prices on Korean exchanges and those based in the US prompts a response from the government. South Korean lawmakers are contemplating to pass legislation that would prohibit the dissemination of information related to Bitcoin futures.
https://goo.gl/kUZNbr

South Korea Preparing Full Crypto Exchange ‘Ban’ – Local Press
Cointelegraph
South Korea is reportedly “considering” a ban on cryptocurrency exchange as lawmakers criticize it as “deceptive.”
https://goo.gl/aQ5oU4

South Korea Makes Renewable Energy Push; The country is expected to have over 10 gigawatts of photovoltaic installations by 2020
By Richard Stubbe – Bloomberg
South Korea is expected to add more than 1 gigawatt of photovoltaic installations this year for the first time, propelled by government support for renewable energy, according to Bloomberg New Energy Finance. The Korea Energy Agency organized its first fixed-price solar auction this year, which helped generators get financing. Annual PV growth is forecast to reach 2 gigawatts by 2020, bringing the total to over 10 gigawatts.
https://goo.gl/QTgsnW

Malaysia

In banking secrecy trial, Rafizi says prosecution witness has financial motivations
BY IDA LIM – TheMalayMailOnline.com
PKR’s Rafizi Ramli today claimed that a prosecution witness testifying against him in a criminal case is motivated by both financial considerations and personal interests.
https://goo.gl/xHYKkS

India

India warns on Bitcoin as investors rush in
BBC News
http://www.bbc.com/news/world-asia-india-42266568

India Invokes Rare Measure to Gain Control of Realty Firm
By Shruti Srivastava and Upmanyu Trivedi – Bloomberg
Unitech takeover second time government assuming control; About 19,000 home owners await possession of flats or homes
India’s bankruptcy court allowed the government to appoint new management for real-estate giant Unitech Ltd. in a rare move, as the corporate affairs ministry sought to take control of the embattled company.
https://goo.gl/UUFnWz

Phoenix Looks to India to Feed Africa as Part of Rice Expansion
By Supunnabul Suwannakij – Bloomberg
Company aims to boost rice trading volume to 2.2 million tons; Plans to spend $300 million over 5 years to expand processing
Food and resources company Phoenix Commodities Ltd. will buy more rice from India as it expands its business in Africa to meet increasing demand.
https://goo.gl/wQ83GQ

Bitcoin world’s fifth-largest currency, beating rupee; Cryptocurrency’s rising value is forcing global central banks to form a view on bitcoin
Business Standard
According to data from the RBI, the value of the country’s currency in circulation was $271.6 bn. Compared to that, as many as 16,727,450 bitcoins have been mined which put their market cap (m-cap) at $277 bn till 2 pm on Friday, toppling the rupee as the world’s fifth-largest currency; bitcoin’s m-cap had breached the $300 bn on Thursday night, before falling.
https://goo.gl/dnfqng

Australia

Australia bourse to use blockchain in ‘world-first’
By GREG WOOD – Japan Today
Australia’s main stock exchange has said it will use blockchain, the technology behind cryptocurrency bitcoin, to process its equities transactions in a shift touted as a world-first for a major financial institution.
https://goo.gl/eXnsME

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About Author

Lothian is executive chairman and CEO of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and three industry newsletters.